Last Friday I posted Deconstructing The Most Hated Trade Of The Decade, The 375% BoomBustBlog Apple Call!!, wherein I outlined the profitability of the BoomBustBlog Apple research from a trading perspective. This crux of that article was to debunk the widely assumed notion that I was bearish on Apple's share price for 2 years. The reality of the matter was that the paid research and opinion clearly supported much of Apple's share price until right about the last earnings report, until I notably went bearish and Apple promptly lost 25%.

apple stock and front month options

Notice how this chart shows subscription research would have provided ample profits LONG and short, with the long presumed to be unleverred as a straight stock purchase. This is to put to bed any naysayers. Now, as to whether my many proclamations over the last two years regarding Apple were able to hold water, we let the facts speak on the reasoning behind the call and the accuracy of my call in the deterioration of Apple's margins, market share and status. The following was a document that was only available to paid subscribers (published in late 2010) but now is freely available since its message has come to pass. As you read this, please keep in mind that the document was published a year and a half ago, even though it does seem like it is recent. I have just released fresh research on Apple that details the lower bounds (pessimistic scenario) that I see for the share price. Subscribers can access it here Apple 4Q2012 update professional & institutional and Apple 4Q2012 update - retail).

I hear so little hate on the Apple call these days. When the stock first dropped after the (3rd BoomBustBlog forecast) earnings miss and the lackluster iPhone 5 debut, all I heard was "well you've been pessimistic on Apple for years!". When I released my research to actually show that I've been one of the most realistic and accurate investor/analysts to follow Apple, I then heard "but your timing was off!". When I pointed to the specific call to move to the pessimistic band of my research in early October (when Apple broke $700, an all time high), and the stock dropped nearly 25%, all I heard was......................................................................................................................................................................................................

Let this be a lesson to one and all! Do not fall in love with a name, a stock, a company, or an idea. Save your love for your significant others and your children. Let's walk through a hypothetical BoomBustBlogger's Apple holdings, assuming he followed recommended research valuation bands, presumably pushing a 375% gain and counting, unless he decides to take profits at this point. I will do this by simply reviewing the blog posts.

As you can see from the charts below, I have always been fairly accurate on the share price of Apple. I did personally try to short it last year as it missed earnings (and the price did drop), but it was only marginally profitable. After that my subscription research implied Apple's share price was not excessively valued in the base case scenario, implicitly riding the wave up via valuations. I even moved the optimistic valuation band higher on 3/15/12 after underestimating foreign and Asian sales. All of this does not discount the infamous margin compression theory that was the backbone of the pessimistic scenario, as we shall soon see.

As soon as I got a hold of an actual iPhone 5 I knew the real short was in. After a 42% rise in Apple's share price I publicly moved my focus towards the pessimistic valuation band in my October 12 post A Review Of The Accuracy Of Last Quarter's Apple Earnings Notes (subscribers see Apple 4Q2012 update professional & institutional and Apple 4Q2012 update - retail). This post and the several subsequent posts listed the specific reasons why I knew that Apple had officially seen its heyday from a stock value perspective. Front month slightly OTM puts on Apple (strike price chosen arbitrarily so as to protect the intellectual property that is the BoomBustBlog pessimistic valuation bands, which are for paying subscribers only) have yielded 314% so far. The ride up on Apple long stock (42%) plus the timely called ride down via short dated puts (314%) make a delicious dinner for the year and window dressing at your local underperforming hedge fund, eh?

To begin with, brand new Apple valuation and forensic research is now available to all subscribers. I suggest you jump on it now while it's hot...

apple product chart growth copy

Well, it looks as if my Apple ruminations and research have come to Fruition - and rather accurately at that. Since Apple has such a cult following, I will set the facts straight right here in a nifty little timeline as Apple tumbles in real time. This is to correct those who are comprehension challenged in saying that I've been crying to short Apple for 400 points. To begin with, I run a subscription site, I generally don't give away actionable advice for free, I charge for it. I have warned about Apple's macro and business conditions - yes, but whether to go long or short on the stock, I only opined in public once. Read below to see how that turned out. My next post will start revealing some of my actual subscription materials in order to make public the accuracy and prescience therein. Is it time for 1000s and 1000s of rose colored #iPhone sporting #iSheep and #fanbois to issue kudos to the BoomBust???

I have been most accurate in tracking Apple over the last couple of years, as I have been with Google and RIMM (and from a tertiary perspective, MSFT) - the only tech companies that I have analyzed since the great crash. I'm more well known as a banking/finance/global macro/real estate guy, but my success in tech is comparable.

A subscriber convinced me to post the 1st quarter's valuation bands (subscribers, see Apple Margin & Valuation Note 03/15/2012) for Apple to squelch the comments of those who are guessing what's behind the firewall. Our base case scenario was right on target, and during the target and after the earnings release I realized that we underestimated international (especially Asian) sell though and shifted the weight to out optimistic band which also proved fairly accurate. As all can notice, the pessimistic band is not show, and that is where the value lies here. I am now shifting my bias towards (that's towards, not to) the pessimistic band, for I feel Apple has now started to feel the competitive and margin pressures that I warned of, and has done so right at the deadline that I gave in 2010 (this is just as much a factor of luck as it is skill, alas, if it bears fruit it bears fruit). The latest valuation bands can be accessed by paying subscribers below (click here to subscribe):

To begin with, brand new Apple valuation and forensic research is now available to all subscribers. I suggest you jump on it now while it's hot...

apple product chart growth copyapple product chart growth copy

Well, it looks as if my Apple ruminations and research have come to Fruition - and rather accurately at that. Since Apple has such a cult following, I will set the facts straight right here in a nifty little timeline as Apple tumbles in real time. This is to correct those who are comprehension challenged in saying that I've been crying to short Apple for 400 points. To begin with, I run a subscription site, I generally don't give away actionable advice for free, I charge for it. I have warned about Apple's macro and business conditions - yes, but whether to go long or short on the stock,I only opined in public once. Read below to see how that turned out. My next post will start revealing some of my actual subscription materials in order to make public the accuracy and prescience therein. Is it time for 1000s and 1000s of rose colored #iPhone sporting #iSheep and #fanbois to issue kudos to the BoomBust???

Now that the weakness in Apple is apparent to all, and not just BoomBustBlog subscribers.... AAPL priced relative to the SPY... looking for this 4 year trend to break for the aapl story to be over as a market out-performer.

I discussed this in detail with Lauren Lyster on Capital Account. The margin discussion started at 7:55. In this video I also warned that when the iBubble goes pop, so goes the NASDAQ, and as if on cue...

Stamford, Connecticut-based Rochdale, which employs noted bank analyst Dick Bove, is looking for a possible deal to recapitalize such as a capital injection or a merger, Bloomberg reports citing sources familiar.

Well, it's obvious the brokerage didn't buy that trader a subscription to BoomBustBlog. I've been following Apple for roughly two years now and have been one of the (if not the) most accurate fundamental pundits on said matter, with my valuations hugging Apple's share price rather tightly for the entire time I have followed it.

aapl research accuracy copy

Reference Apple - Competition and Cost Structure 05/16/2011, which is now available for download to all due to its dated nature - even those who do not subscribe. Please note that this report only includes base case scenarios, while the latter reports included base, optimistic and pessimistic scenarios - which is much more realistic. Although some of the later reports are also stale-dated, they contain valuable knowledge that I'm not prepared to release to the public for free at this time.

A subscriber convinced me to post the 1st quarter's valuation bands (subscribers, see Apple Margin & Valuation Note 03/15/2012) for Apple to squelch the comments of those who are guessing what's behind the firewall. Our base case scenario was right on target, and during the target and after the earnings release I realized that we underestimated international (especially Asian) sell though and shifted the weight towards the optimistic band which also proved fairly accurate. As all can notice, the pessimistic band is not shown, and that is where the value lies here. I am now shifting my bias towards (that's towards, not to) the pessimistic band, for I feel Apple has now started to feel the competitive and margin pressures that I warned of, and has done so right at the deadline that I gave in 2010 (this is just as much a factor of luck as it is skill, alas, if it bears fruit it bears fruit). The latest valuation bands can be accessed by paying subscribers below (click here to subscribe):

Just to make this perfectly clear, I've been stating that Apple had margin compression stemming from extreme competition coming for two years now. That does not mean that Apple will collapse. As a matter of fact, I've included my stale Apple reports and a graph that shows I've pretty much been on target with Apple's share price the whole while. And for those who are so concerned with timing, I've highlighted in bold font where I've told subscribers to turn pessimistic on Apple's share price. This was October, roughly 12% ago in share price and many tens of billions of dollars in market value.

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Keep the following in mind as you peruse this post...

apple product chart growth

I discussed this in detail with Lauren Lyster on Capital Account. The margin discussion started at 7:55.

For those who haven't heard my description of Apple's arch competitor, Google's, business model, look here:

Since I have released so much opinion and analysis on Apple over the last few weeks, I can keep this post short, sweet and to the point. Apple missed earnings expectations yesterday, exactly as I anticipated and expressed to readers and subscribers. This is the third miss by Apple that I called. What makes the call so interesting is that it's actually quite an obvious call and doesn't deserve much credit. That's the point! Despite the obvious evidence that Apple is following in the footprints of Research in Motion and the Blackberry, Apple is still held (and actively bought) by every hedge fund, arm chair investor, cab driver and his grand aunt's cousin's dog walker!!! Remember Research in Motion, they had very strong static fundamentals and everybody used Blackberriers (even the newly elected President who was addicted to his "Crackberry") when I first suggested my subscribers short them in early 2010 as well, reference the following:

If you go through all three of the posts above, you will see an iconic example of Apple and the iPhone, declining market share, ever so slight pressure on margins amid tense competition, but bulging fundamental performance and a strong brand following. Just two years later RIMM is a single digit stock. Why? Management refused to do what Microsoft is doing now (reference Microsoft Is Doing What The "Has Been Giants Of Yesteryear" Were Afraid To Do, Make A Radical Change BEFORE ITS TOO LATE!). Pooh pooh MSFT if you wish, they were one of the only recent tech companies to successully remain dominant and relevant through a tech paradigm shift. As this next paradigm shift approaches, you'd be a fool to discount and dismiss that company out of hand! RIM simply refused to accept the fact that the market demanded a larger, touch-centric screen with ample multimedia capabilities. To date, they still don't have a credible offering - THREE years later.

Well, with the advent of the iPhone 5 it appears as if Apple doesn't understand that the market demands bigger, higher res screens either. Despite the fact that the iPhone is responsible for ~70% of Apple's profits, it's offering its flagship with last year's Android tech while its competitors are innovating like bananas, offering 5.5 inch screens and 1080p resolutions with 32 hour battery lives! Both RIMM and Apple are refusing to slash their own margins, and rather would ride those fat margins out along their natural lives. The problem with this mentality - as RIMM investors can attest, is that if you don't cut your margins, your competitors will happily do it for you! Ask Samsung and Google if I'm joking...

I have been most accurate in tracking Apple over the last couple of years, as I have been with Google and RIMM (and from a tertiary perspective, MSFT) - the only tech companies that I have analyzed since the great crash. I'm more well known as a banking/finance/global macro/real estate guy, but my success in tech is comparable.

Below, I drilled down on the date and used a percentage difference view to illustrate the improvement in P/E stemming from the earnings beats.

In our analysis of Apple, we are using real world assumptions of future performance derived from backing in to the low balling this company is prone to. If you look at its history carefully you can gauge what management is comfortable with, hence what they may be capable of on the margin. Using these more realistic numbers, it was quite obvious that Apple would deliver a miss this quarter in its battle with the Android! The following is the reason why - Margin Compression

Key take aways from this quarter:

iPad sales came in low

This is a trend, not an excusable one time event as Tim Cook attempt to assert, blaming it on "expectations". See the excerpts from our subscriber docs below.

apple product chart growth

Apple 2Q2012 results analysis Final - redacted Page 2

Enterprise-wide margins came in lower than expected and lower than last quarter!

I discussed this in detail with Lauren Lyster on Capital Account. The margin discussion started at 7:55.

See how my subscribers read about the situation in detail two quarters ago!

Apple 2Q2012 results analysis Final - redacted Page 1

Apple 2Q2012 results analysis Final - redacted Page 3

Apple 2Q2012 results analysis Final Page 4

For those who haven't heard my description of Apple's arch competitor, Google's, business model, look here:

In short, nearly 70% of profits concentrated in one, single product - the iPhone 4/5, whcih is so far behind the Samsung Galaxy Note 2 and S3 (roughly two years behind) that the only real sales they will get will come from extreme brand loyalty or from those who have never tried the Samsung and other competing Android products. The earnings diversification route taken was the massively successful iPad, which is already succumbing to massive margin compression AND is losing market share to superior tech at lower prices at the same time. For the first time since the iPod was released, Apple is playing catchup to Google et. al., by releasing a smaller tablet - after the fact. A tablet that, upon launch, will already be obsolesced and under priced by the competition. While these tactics may permit Apple to grow at impressive rates, basically they will start to simply cannibalize their existing user base and many new users will opt for the best and the newest tech. Just ask Research in Motion!!!

Well, this is a good time (albeit a risky one) for MSFT. With revenues and margins declining on a structural basis for the first time (in its history) it is actually attempting to reposition itself to lead in the fastest growing segment in technology, not to mention the segment that is currently eating its lunch. That is the ultra mobile computing segment. Windows phone is a work in progress, and while capable from a software perspective, still lacks the downright killer hardware and flexibility of Android high end devices an also lacks the cult-like following and brand loyalty of Apple's devices. It's a shame since MSFT was actually in this space early, nearly first. Actually, it was early in smart phones, right behind Nokia and Psion (both European companies) and was first in actual usable (arguably) tablets - both in the early 1990's. It that monopolistic apathy that allowed Apple to come from behind with relatively dumbed down tech and outgrow Microsoft. The Surface Tablet is MSFT's revenge though. CNet calls it the best productivity app yet...

Like the Galaxy Note 2 clearly makes the iPhone appear to be a toy rather than a useful device, the Surface does the same to the iPad.

I noticed that many pundits pan the Surface for its lack of available apps. The Surface is a 1st gen product, and it does lack a wealth (or even a moderate amount) of 3rd party apps. What seems to be overlooked is that MSFT has built the Surface around the most in demand, the most profitable, and the least likely to be accurately replicated apps in the industry - the ubiquitous Microsoft Office Suite of apps. To assert that the Surface doesn't have any apps when it ships with the latest and the only touch-centric version of this app suite is to totally miss the point of the product. Let's be serious here- the iPad, and most Android tablets (save the Asus Transformer series) is/are useless for true productivity where content creation (sans drawing on a screen) and productivity are concerned. They come nowhere near PC replacements. Even those products that can come near (such as the Transformer Prime) lack a truly accurate reproduction of the office suite that is used in 90% of the workplaces world wide. As this Bloomberg article states: Microsoft’s Surface Tablet Lacks Apps to Rival IPad

Microsoft Corp. (MSFT) will be constrained in a contest against Apple Inc. (AAPL) in the market for handheld computers by unveiling a tablet that doesn't work with some of the most widely used downloadable applications. The Surface RT, a tablet that runs the latest version of Microsoft’s flagship operating system and goes on sale tomorrow, won’t feature applications for Facebook Inc. (FB)’s social-networking service or Apple’s iTunes music store.

One can combine the profits (and daily users) from Facebook and iTunes, double the sum, and you probably wouldn't get to half the profits of the Office franchise. True Office compatibility is what is holding back those who spend the truly big bucks in both the consumer and the enterprise side from adapting tablets en masse and truly dropping the desktop or notebook form factor PC for good. Comparing Facebook and iTunes to Office is like comparing a go kart to a minivan. Anyway you look at it, factoring superior build quality, pleasing aesthetics, and most importantly, something you can actually use to get work done, Microsoft has released a truly credible threat to the Android/Apple franchise in the tablet space - I still remain unconvinced in the phone space (where Android is killing them), but the jury is still out and the curtains don't' close till the calorically challenge chick sings...book

The Surface is being touted as a full PC (Ballmer: Microsoft Surface 'Literally a Full PC), and it appears as if there's some credibility to that. It will be very interesting to see what Google's response is (they have purchased a popular mobile phone/tablet office suite to bolser their current Google Apps/Drive cloud storage offering. Bundling this into both high end tablets and thier upcoming $99 offerings with ultra thin keyboard covers would be just what the doctor offered for both the enterprise and the student markets. Unfortunately, I feel Apple's hubris may be their shortcoming, for the iPad-mini is a disappointment, and appears to be simply an answer to the Nexus 7 and Amazon tablet, overpriced to avoid the margin compression inevitably coming down the pike (How Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall Street Will Enable This Without Sheeple Investor’s Having a Clue). The same appears to go for the iPhone 5, for I feel they should have packed much more tech into that device. It is so far behind the Samsung Galaxy Note 2 and S3 (roughly two years behind) that the only real sales they will get will come from extreme brand loyalty or from those who have never tried the Samsung and other competing Android products. While this may permit Apple to grow at impressive rates, basically they will start to simply cannibalize their existing user base and many new users will opt for the best and the newest tech. Apple may feel "Blackberried" or "RIMM"ed sooner than expected.

Facebook's price bounced 20%+ between earnings announcement yesterday and the posting of this article. Curiously enough, the stock bounced to within a mere SEVENTY CENTS of our mutliple's based valuation target the day after earnings. I feel some love is in order here, for that was damn good call! Subscribers, please reference the FB IPO Analysis & Valuation Note - update with per share valuation released exactly 5 months ago on 05/21/2012 (click here to subscribe). Just to remember where we came from (I'm just using the time period where it was possible to short or buy puts on the stock, to keep things real)....

As for keeping it real:

MOBILE GROWTH: Roughly 14 percent of its ad revenue came from mobile advertising, up from somewhere around zero. This is to be expected, but since we don't have any real baselines or history to compare this to, it truly means nothing other than Facebook has and can make SOME money from mobile. The query du jour is how much, and when, no?

THE NUMBERS: Facebook Inc. posted a loss of $59 million, or 2 cents per share, in the July-September period. Adjusted earnings of 12 cents per share were a penny better than expected. Revenue rose 32 percent to $1.26 billion. That's also higher than the $1.23 billion Wall Street was looking for.

All should still be aware of the primary factor in this "growth company" stock's story....

image002

These facts should not have been a surprise, and blog subscribers were made aware nearly a year ago, as excerpted from our 2nd most recent forensic analysis.

FB IPO Analysis Valuation Note Page 03

As excerpted from Facebook's earnings press release: Payments and other fees revenue for the third quarter was $176 million, a 13% increase over the same quarter in the prior year and a 9% decline sequentially from the second quarter of 2012. So, where did that drop likely come from? Well reference the part about Zynga below, warned roughly 7 months before the fact!

I made it clear that those who lost roughly half of their capital at or near the IPO price simply forfeited those funds from not readign BoomBustBlog, and this sitaution was virtually guaranteed. I felt so strongly about it that I made much of my opinion available for free this time.

Here's where I broke it down on Capital Account

I also happened to do the same on the Max Kesier show...

I discussed Facebook on the Peter Schiff radio show, the Facebook excerpt is below...

Additional Facebook analysis, valuationa and commentary.

On Max Keiser, go to the 13:55 marker for more on Facebook...

Double your money by shorting the Street's advice! Once Again!

Here is a full year of free blog posts and paid research material warning that ANYBODY following the lead of Goldman, Morgan Stanely and JP Morgan on the Facebook offereing would get their Face(book)s RIPPED!!! Could you imagine me on a reality TV show based on this stuff??? Well, it's coming...

Below are my thoughts, but before I get into them I will like to reiterate that many pundits, investors, analysts and traders still have no clue as to the type of company that Google is. Imagine a private equity firm that has consistently put out the leaders (as in the number one company) in several industries, every 3rd year or so for 10 years straight. Now, take that private equity fund and give it it's own operations with some of the smartest engineers and strategists in the world, and have them spend 1.5 Billion (that's Billion with a "B"") in R&D annually to discover new things. Now fund that private equity fund and R&D camp with cashflow from the world's largest automated web advertising firm, whose closest competition is so far away as to barely even be known for its wares by the average person. Now, add to it the worlds fastest growing, largesta and most technically advanced mobile operating system. Then add to it the largest patent portfolio and 4th largest handset maker in the world (remember the mobile industry is where its at now). Then add to it the largest and by far the most prominent digital media destination AND publsihing property in the world. Then add to that the largest consumer and enterprise cloud operations in the world.

Finally, add to the mix the largest, most oft use and most entrenched search engine which (when combined with the cloud properties) basically makes this company the defacto gatekeeper for digital data for the world.

What would you have with this new world conglomerate? You'd have Google, that's what you'd have. Now, on to my anecdotal quips on Google's dramatic Q3.

Enterprise wide margins have dropped. I suspect the Motorola acquisition and the influx of mobile revenues, which alter the supply-demand landscape dramatically, thus dropping pricing power for the near to medium term.

Traffic acquisition costs are up 8% YOY - paying more for traffic, but less than margin expanding...

Motorola revenues are material, and their margins are weak which pulls down overall margins. This is a foreseen negative but management obviously feels it is worth it, likely due to the largest patent portfolio in the business, the 2nd largest set top box position in the industry and the 4th (roughly) best handset manufacturer in the industry. I'll side with management on this one.

"Other costs of revenues" more than doubled YOY, which should be a major cause for concern. As a matter of fact it is such a large increase as to be akin to one-time events. These need to be investigated in detail.

The key determinant of the value of this quarter's numbers is whether these increased expenses are (in increasing value from very bad to potentially very good):

My bets are that those algo traders and armchair pundits masquerading as investors and analysts are overlooking strategic investment and calling it expense. A glimpse into the EDGAR filing’s cash flow quip reveals some clues: “Cash Flow and Capital Expenditures – Net cash provided by operating activities in the third quarter of 2012 totaled $4.0 billion, compared to $3.95 billion in the third quarter of 2011. In the third quarter of 2012, capital expenditures were $872 million, the majority of which was for production equipment and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the third quarter of 2012, free cash flow was $3.13 billion. We expect to continue to make significant capital expenditures.”

You heard it direct from the horse’s mouth! Despite heavy infrastructure and development expenditures, plus the biggest acquisition ever, Google increased free cash flow. Google will make a significant push into original digital media and content. Expect YouTube to compete directly with NBC, FOX, HBO, etc.

Risky? Yes!

Potentially profitable and disruptive? Ask the classified and newspaper industries (or at least what’s left of them) if Google knows what it’s doing!!!!

As excerpted from our nearly 70 page forensic Google report (Subscribers, see Google Final Report 10/08/2010), I attempt to educate on the investment prowess of Google (that is both internal investment and external acquisition). Remember, many of Google's investments have become the largest instances of their type in the indsutry. The largest web video presence: YouTube! The largest mobile OS? Android! The largest mobile ad presence? Admob! the largest online productivity suite? Docs/Drive! I can go on with Gmail, Voice, etc., but if I haven't driven the message home yet then I probably never will. Google management has made it clear that YouTube will compete with major networks and Google Docs will compete and is actually pulling some business from Microsoft Office in the Enterprise. These are mere anecdotal examples. We all know the Android story already...

The table of contents outlines how we have broken Google down into distinct businesses and identified both the individual business models and the potential revenue streams, as well as valuation for each business line.

Page 57 of the analysis shows a sensitivity table which outlines the various scenarios that can come into play and how it will change our outlook and valuation opinion.

Finally, let's look at Google today compare to the broad market over the last 6 months...

A subscriber convinced me to post the 1st quarter's valuation bands (subscribers, see Apple Margin & Valuation Note 03/15/2012) for Apple to squelch the comments of those who are guessing what's behind the firewall. Our base case scenario was right on target, and during the target and after the earnings release I realized that we underestimated international (especially Asian) sell though and shifted the weight to out optimistic band which also proved fairly accurate. As all can notice, the pessimistic band is not show, and that is where the value lies here. I am now shifting my bias towards (that's towards, not to) the pessimistic band, for I feel Apple has now started to feel the competitive and margin pressures that I warned of, and has done so right at the deadline that I gave in 2010 (this is just as much a factor of luck as it is skill, alas, if it bears fruit it bears fruit). The latest valuation bands can be accessed by paying subscribers below (click here to subscribe):

To begin with, brand new Apple valuation and forensic research is now available to all subscribers. I suggest you jump on it now while it's hot...

apple product chart growth copy

Well, it looks as if my Apple ruminations and research have come to Fruition - and rather accurately at that. Since Apple has such a cult following, I will set the facts straight right here in a nifty little timeline as Apple tumbles in real time. This is to correct those who are comprehension challenged in saying that I've been crying to short Apple for 400 points. To begin with, I run a subscription site, I generally don't give away actionable advice for free, I charge for it. I have warned about Apple's macro and business conditions - yes, but whether to go long or short on the stock,I only opined in public once. Read below to see how that turned out. My next post will start revealing some of my actual subscription materials in order to make public the accuracy and prescience therein. Is it time for 1000s and 1000s of rose colored #iPhone sporting #iSheep and #fanbois to issue kudos to the BoomBust???

Spring 2010 - I declare the mobile computing wars are on and Google looks to be the front runner (light years ahead of the sell side)...

The Creatively Destructive Pace of Technology Innovation and the Paradigm Shift known as the Mobile Computing Wars!

In October of 2010, I warned that Apple would face margin compression and make a short candidate. I DIDN'T say it should be short at that time, but I did say within 4 to 8 quarters competitive realities would catch up with it...

No Frames

October 2011

So, what happened exactly 4 quarters later? Oh yeah, Apple misses on margins, the stock drops - Reggie Middleton Wasn't the ONLY Openly Apple Bear in the ..This was the only time where I publicly stated I would short Apple. Announce contrarian short candidate - company misses and the stock dropped, right on the 4 to 8 quarter schedule! Sounds pretty good to me. Go to 2:20 in the video for a clear description of the margin compression illustrated below...

In the mean time, here are some updated margin charts to support what was said in the video and the extant Apple research for subscribers to review.

iBubbleiBubble

Yes, Apple is the vast majority of the desktop computer equity market capitalization!

Apple revenues as a smartphone companyApple revenues as a smartphone company

Apple has, in just a few short years, morphed from a computer computer to a smartphone and tablet company, which essentially are just new age computers anyway. It's just that no one sees Motorola, RIMM or Nokia that way!

ipad marginsipad margins

iphone marginsiphone margins

As the key revenue drivers see there margins compress (and I told you so two years ago), entity level margins will drop as well:

Now, exactly 8 quarters after my 4 to 8 quarter premonition, does everybody want to get short Apple and long Google??????

October 2012: Everyone jumps on the BoomBustBlog bandwagon...

goog vs aapl

Below is my latest on Apple, showing whether I believe this is the time to short and what I think Apple is really worth. I feel I have been on the forefront of the Apple issue AND have been rather accurate as well.

Click here to subscribe. After subscribing, I wish all newcomers to download the very simply and quick Apple margin model below to put your most optimistic assumptions in to see how they may look in terms of product sales.

The table of contents outlines how we have broken Google down into distinct businesses and identified both the individual business models and the potential revenue streams, as well as valuation for each business line.

Page 57 of the analysis shows a sensitivity table which outlines the various scenarios that can come into play and how it will change our outlook and valuation opinion.

Now that the weakness in Apple is apparent to all, and not just BoomBustBlog subscribers.... AAPL priced relative to the SPY... looking for this 4 year trend to break for the aapl story to be over as a market out-performer.

AAPL relative weekly rising wedge

My next post on this topic will answer the obvious quetion, "Is it now time to short Apple?" - as I release the content from or updated Apple model. This will be some very, very good stuff and well worth the subscription rate.